Pinktober Biotechs
AnnaLisa is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Pinktober is here and all things breast cancer awareness related. If you are a breast cancer survivor I understand it can be painful to be reminded at every turn but just remember it means progress for the women after you. If you know at least eight females, one will likely be diagnosed with breast cancer in her lifetime. And there are some biotechs making advances in the field, Celgene (NASDAQ: CELG), Galena Biopharma and ImmunoGen (NASDAQ: IMGN) that may be worth a position of pink honor in your portfolio.
Genentech, now owned by Swiss drugmaker Roche Holding, was a pioneer in the field with its Herceptin (trastuzumab), a monoclonal antibody drug which was a lifesaver for many women whose breast cancer was HER2-positive (HER2 refers to a human epidermal growth factor receptor gene which is present in normal breast tissue but is profligate in malignant cells).
Women with HER2 positive tumors were more likely to have their cancer come back and grow much quicker than women with HER2 negative tumors. Herceptin picks off the HER2 positive receptor cells leading to 50% less recurrence of cancer than would be expected in HER2 positive women.
ImmunoGen has been partnering with Roche’s Genentech division on a drug called trastuzumab emtanzine on trials and just weeks ago announced in Vienna and in the New England Journal of Medicine their EMILIA phase III trial data. It showed significant outcome survival of more than five months above the median by those who were treated with the Trastuzumab emtanzine (T-DM1) as opposed to patients treated with standard of care Herceptin plus either Tykerb (a Glaxo Smith Kline product) or Xeloda (Roche product). The risk of death was reduced by 32% with the ImmunoGen Targeted Antibody Payload technology (in this case a SMCC linker and DM1 cancer killer) added to the Herceptin antibody. Data presented at ASCO in June also showed patients tolerated the trastuzumab ematazine better with fewer severe adverse effects.
ImmunoGen’s most advanced drug in its pipeline is this TAP payload added to Herceptin. It's like adding warp drive power Herceptin. It has at least six TAP technology compounds testing in collaboration with companies such as Amgen, Lilly, Roche, and Novartis (these are mostly phase I). It’s working together with Sanofi on SAR3419 in phase II. In addition, ImmunoGen has three wholly owned compounds, Lorotuzumab Mertansine for cancers that express CD56 including small cell lung cancer (phase II status), IMGN 529 for B cell malignancies (phase I status), and IMGN 853 for foliate overexpressing cancers (also phase I status).
ImmunoGen is a speculative biotech but has some very significant deep-pocket partners who obviously believe in the promise of their payload added treatments. It has a negative EPS of -0.96. As yet it has only one candidate advanced to phase III and pre-FDA approval status. Applications for FDA approval of the trastuzumab emtanzine have been submitted by Roche. ImmunoGen reports October 26.
Sufferers from other cancers sometimes feel neglected during Pinktober but many of these new drugs are finding applications for other cancers as well like Celgene which was just in the news last week because its drug Abraxane, indicated for metastatic breast cancer after first line treatments have not been successful, just received FDA approval for its use in non-small cell lung cancer. The drug is already in several different phases of trials for more cancer indications including cancers of the pancreas, bladder, ovaries, and metastatic melanomas. Its approved use in breast cancer is already adding revenues to Celgene (over $168 million in US sales this year) as well as its better known Revlimid, used in blood cancer, which is also in different stages of trials for other cancer applications.
Celgene has a pretty big market cap at 33.83 billion and has a P/E of 22.80. Its return on assets is 11.48% and it’s just barely beating the S&P 500 this year, up 20.93%. Unlike some really big pharmas, Celgene has no shortage of products in its pipeline with four commercial stage products and ten other products in various preclinical and clinical phase trials. CEO Robert Hugin owns 438,126 shares himself. Celegene was downgraded by Oppenheimer on October 15.
Galena Biopharma (NASDAQ: GALE) is very small and very volatile but is somewhat the Bizarro twin of ImmunoGen as it concentrates on cancer vaccines to prevent cancer and cancer recurrence. E39 and NeuVax are Galena’s most promising candidates. E39 is indicated for folate overexpression using FBP (folate binding protein). Its Neuvax, a vaccine in phase III, again almost the reverse of ImmunoGen, targets low HER2 expressed tumors which represents two thirds of breast cancer patients, for whom Herceptin would be unsuitable. So far, results for NeuVax have shown a 50% reduction in recurrence for low HER2 expressers, virtually the same result for Herceptin with the high HER2 expressers.
On August 15 Cantor Fitzgerald analyst Mara Goldstein upgraded Galena to a buy, price target $4.00, which would be slightly more than a double from its October 12 closing price of $1.85.
There you have it, a continuum of breast cancer stocks from most speculative Galena to Celgene practically a Big Pharma like Roche. Depending on your tolerance for risk these are the names that are in the Pinktober biotech news and the ones that are making important progress against breast cancer.
leglamp has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend ImmunoGen. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
